U.S. President Joe Biden has announced a massive infrastructure plan intended to accelerate the transition to clean technology in a sprawling eight-year program that costs $2 trillion.
The plan also touches roads, bridges and broadband access; social policy, like public housing and funding for day care spots; and it raises and rearranges corporate taxes to pay for it.
But at its core, it’s a climate plan.
With the U.S. increasingly unlikely to impose a nationwide carbon tax or cap-and-trade system, Biden’s focus has shifted to spending record sums of public money on next-generation green technology — from 500,000 vehicle charging stations to a zero-carbon power grid to consumer incentives for electric cars and home retrofits.
“It’s not a plan that tinkers around the edges,” Biden said in a Pittsburgh speech Wednesday to promote what he’s calling the American Jobs Plan.
“It’s a once-in-a-generation investment in America — unlike anything we’ve seen or done since we built the Interstate Highway System, and the space race decades ago. In fact, it’s the largest American investment in jobs since World War Two.”
An effort this size will inevitably have effects beyond the U.S., and this one has a number of implications for Canada — some good, some bad and some to be determined.
Biden isn’t talking about a carbon tax or cap-and-trade. The centrepiece of his climate plan aims to spend huge sums to transform American energy, including building 500,000 new electric car-charging stations. (Lucy Nicholson/Reuters)
First comes a caveat typical for any legislation proposed by an American president, and it’s that there’s no guarantee this will ever become law.
A bill hasn’t even been introduced in Congress yet and it already faces stiff Republican opposition, leaving one likely path to success, and it’s the narrowest one imaginable: if Democrats bypass the Senate’s normal 60-vote rule, they could try passing it through a budget process known as reconciliation, and that would require all 51 Democrats in the Senate, progressives and centrists, to unite around the bill.
This process will likely take months. In the meantime, here are some potential effects of the bill.
Economic stimulus hits the neighbourhood
When someone plows $2 trillion into your neighbourhood, the economic effects tend to spill onto your property.
For the neighbourhood of North America, there’s a general rule of thumb, according to Brett House, vice-president and deputy chief economist at Scotiabank: one percentage point of growth in the U.S. economy causes a half per cent increase in Canada.
In other words, enjoy the stimulus, Canada.
“Biden’s stimulus plan will not only benefit the U.S. economy but will also make Canada’s economy great again,” said Derek Holt, vice-president and head of Capital Markets Economics at Scotiabank.
“There will be significant leakage of U.S. stimulus into Canada as [U.S.] businesses and consumers buy more from America’s trading partners regardless of [Buy American rules],” said Holt.
Now, a word about Buy American.
Buy American: reality and rhetoric
There’s bad news for Canadian companies hoping to land some of these big U.S. government contracts.
Buy American provisions are inevitable in this bill.
Biden promised during the election campaign that public contracts under his infrastructure plan would go to U.S. companies — and he doubled down on that Wednesday.
“Not a contract will go out that I control … to a company that is [not] an American company — with American products all the way down the line, and American workers,” he said.
Let’s see the fine print first.
Biden has been promising Buy American measures since the campaign, as seen in this stop in Michigan in September. (Patrick Semansky/Associated Press)
The actual bill hasn’t been introduced yet, and only when we see those details will it become clear whether the reality matches the rhetoric.
For example: Will the bill address existing trade agreements? Under the World Trade Organization agreement on procurement, free trade is guaranteed for some types of public contracts.
There are other question marks.
What about the WTO’s anti-discrimination rules? A skeptical former U.S. trade official suggested it would be a flagrant violation of those provisions for the U.S. government to hand out subsidies for buying only American-made cars.
Then there’s the challenge of disentangling what even counts as an American car, for example, versus a Canadian and Mexican one. Vehicles are built in cross-border supply chains, with pieces regularly moving back and forth.
But make no mistake that Buy American provisions are coming.
Canada’s chief trade negotiator, Steve Verheul, all but conceded this the other day when he said Canada is simply hoping for exemptions for some sectors, like clean energy.
Energy and climate: Good news, bad news
The plan would certainly reduce U.S. carbon emissions, which are the second-highest in the world, after China. Biden wants the high-polluting U.S. energy grid converted to zero-carbon by 2035.
In the meantime, his plan would establish a clean-energy standard for power utilities to meet. This could mean new sales for Canadian hydro and alternative-energy companies.
For the oil sector, the news is less positive.
The U.S. is the world’s second-highest greenhouse gas emitter. Here, chunks of ice float inside of meltwater pools on top of the Helheim glacier near Tasiilaq, Greenland, in 2018. (Lucas Jackson/Reuters)
On the heels of cancelling the Keystone XL pipeline, Biden would scrap an existing credit in the tax code for U.S. companies that produce oil abroad.
One oil industry analyst in Canada, Rory Johnston, expects that to have, at most, a minor impact in the Alberta oilpatch. Not only has American investment there already dropped, but the sums involved in the credit are small.
The U.S. Environmental and Energy Study Institute cites one federal estimate that says ending the policy would be worth $12.7 billion, over 10 years, to all American oil companies operating around the world.
“[That’s a] very, very small amount in the overall scheme of things,” said Johnston, managing director at Toronto-based investment firm Price Street Inc.
But he said it’s yet another symbolic blow to the sector, revealing the political winds shifting against it.
A tilt in tax competitiveness
Could Canadian companies soon find themselves more competitive against their American peers, in terms of tax burdens?
This plan will push U.S. power utilities to adopt cleaner energy, which could mean more hydro sales from Canada. The two countries promised to co-operate last month on a clean energy transition. (Jonathan Ernst/Reuters)
Biden’s plan would raise U.S. corporate taxes seven percentage points, to 28 per cent, undoing some of the Trump-era cuts.
This would bring the U.S. back to its former international ranking: with higher marginal rates than Canada and almost every other developed country.
Jack Mintz, a tax expert and president’s fellow at the University of Calgary, said this is a long-term threat to U.S. companies.
He said they would be hit with a double whammy — first with a tax hike, then with the post-2023 phaseout of writeoffs built into the 2017 law signed by Donald Trump.
“There’s going to be almost a 50 per cent hike on the overall effective tax rate on capital in the United States between those two items,” Mintz said. “It’ll certainly make the U.S. less competitive.”
It’s not clear yet whether this helps investment in Canada, Mintz said. Because there’s another stick built into Biden’s plan — one designed to whack American companies that shift operations abroad.
Biden’s plan would have major tax implications, undoing a large part of former president Donald Trump’s corporate tax cuts, a signature achievement of his tenure. (Kevin Lamarque/Reuters)
Biden wants to end some tax exemptions for American companies drawing foreign profits and impose a new minimum international rate of 21 per cent.
Mintz called it a “Trump-like, America First-type strategy.”
Whether or not a U.S. company winds up facing a higher tax burden in Canada than back home will depend on other specifics of the tax code, and we’ll know more once we see the bill.
As for his general economic takeaway on Biden’s proposal, and its effect on Canada, Mintz said: “It’s hard to say whether it will be positive for Canada or not.”
EDMONTON – The legendary k.d. lang got the band back together at the Canadian Country Music Association awards show.
Lang teamed up with the Reclines for the first time in 35 years to belt out “Big Boned Gal” from their last album together in 1989.
Clad in a blue and green western-style dress, lang strut across the stage in Edmonton to embody the “big boned gal from southern Alberta.”
The awards show saw Alberta’s MacKenzie Porter and Ontario’s Josh Ross take home hardware for being best female and male artists of the year.
Ross also won entertainer of the year and single of the year for “Trouble.”
Ontario artist Jade Eagleson won album of the year for “Do It Anyway.”
The James Barker Band from Woodville, Ont., won fans’ choice and group of the year.
During their acceptance speech, frontman Barker hinted at new music and a possible tour in 2025.
Ross says he and his band play roughly 150 shows every year and are never home, but says taking home entertainer of the year made the hard work worth it.
Porter won for female artist of the year and top video for “Chasing Tornadoes.”
The female artist win ends the five-year streak of Tenille Townes being awarded the coveted hardware.
Porter had been nominated seven times previously for the award in the past decade but hadn’t won until now.
The artist from Medicine Hat, Alta., says it takes a lot of hard work and hustle to succeed as a female in the country music industry and gave a shout out to her fellow singers and her newborn daughter.
Joining the two artists in the winners’ circle was Ontario singer-songwriter Owen Riegling, who won for breakthrough artist of the year.
The show began with American artist and co-host Thomas Rhett being dubbed an honorary Canadian by Edmonton Oilers players Corey Perry and Leon Draisaitl.
Rhett donned an Oilers jersey that was gifted to him by the pair.
This report by The Canadian Press was first published Sept. 14, 2024.
EDMONTON – Ontario country artist Jade Eagleson has won album of the year at the 2024 Canadian Country Music Association Awards in Edmonton.
The singer from Bailieboro, Ont., was up for six awards alongside Alberta’s MacKenzie Porter.
Eagleson took home album of the year for “Do It Anyway” and says he’s thankful to his wife and management team for helping him reach the level he’s at.
The James Barker Band from Woodville, Ont., also won fans’ choice and group of the year at the award show, held in Edmonton.
During their acceptance speech, frontman Barker hinted at new music and a possible tour in 2025.
Another Ontario crooner, Josh Ross, has taken home a trio of awards, receiving entertainer of the year, male artist of the year and single of the year.
He says he and his band play roughly 150 shows every year and are never home, but says taking home entertainer of the year makes the hard work worth it.
Porter took home female artist of the year, ending the five-year streak of Tenille Townes being awarded the coveted hardware.
Porter had been nominated seven times previously for the award in the past decade but hadn’t won until tonight.
The artist from Medicine Hat, Alta., says it takes a lot of hard work and hustle to succeed as a female in the country music industry and gave a shout out to her fellow singers and her newborn daughter.
Joining the two artists in the winners’ circle was Ontario singer-songwriter Owen Riegling, who won for breakthrough artist of the year.
The show began with American artist and co-host Thomas Rhett being dubbed an honorary Canadian by Edmonton Oilers players Corey Perry and Leon Draisaitl.
Rhett donned an Oilers jersey that was gifted to him by the pair.
The return of k.d. lang and the Reclines was expected to be a highlight of the show.
The appearance will mark the first time the Alberta songstress has teamed up with the band in 35 years and is tied to lang’s induction into the Canadian Country Music Hall of Fame.
The awards show is back in Alberta’s capital for the first time since 2014. It was held in Hamilton last year and in Calgary in 2022.
This report by The Canadian Press was first published Sept. 14, 2024.
VANDERHOOF, B.C. – British Columbia Conservatives are promising changes they say will bring more stability to the province’s struggling forest industry.
Leader John Rustad announced his plan for the sector a week before the official launch of the provincial election campaign, saying a Conservative government would do away with stumpage fees paid when timber is harvested and instead put a tax on the final products that are produced.
Rustad said Saturday that under a provincial Conservative government, a small fee may be charged upfront, but the bulk would come at the end of the process, depending on what type of product is created.
He also promised to review how wildfires are managed, as well as streamline the permit process and review what he calls the province’s “uncompetitive cost structure.”
“British Columbia is by far the highest cost producers of any jurisdiction in North America. We need to be able to drive down those costs, so that our forest sector can actually be able to do the reinvestment, to be able to create the jobs and make sure that they’re still there to be able to support our communities,” he said.
The governing New Democrats meanwhile, say eliminating stumpage fees would inflame the softwood lumber dispute with the United States and hurt forestry workers.
In a statement issued by the NDP, Andrew Mercier, the party’s candidate in Langley-Willowbrook, said Rustad failed to support the industry when he was in government under the former BC Liberals.
“Not only will Rustad’s old thinking and recycled ideas fail to deliver, his proposal to eliminate stumpage would inflame the softwood lumber dispute — punishing forestry workers and communities,” Mercier said, accusing Rustad of ignoring the complexity of the challenges facing the industry.
The softwood lumber dispute between the U.S. and Canada stretches back decades. In August, the U.S. Department of Commerce nearly doubled duties on softwood lumber.
International Trade Minister Mary Ng has said Canada has taken steps to launch two legal challenges under the Canada-United States-Mexico Agreement.
Rustad said a provincial Conservative government would push hard to get a deal with the United States over the ongoing dispute “whether it’s with the rest of Canada or by itself.”
He said his party’s proposed changes are in the name of bringing “stability” and “hope” to the industry that has seen multiple closures of mills in rural communities over the last several years.
Most recently, Canfor Corp. decided to shutter two northern British Columbia sawmills earlier this month, leaving hundreds of workers unemployed by the end of the year.
According to the United Steelworkers union, Canfor has closed 10 mills in the province since November 2011, including nine in northern B.C.
Jeff Bromley, chair of the United Steelworkers wood council, said Saturday the idea of changes in favour of taxing the final product has been floated in the past.
He said the finer details of the Conservative plan will be important, but that the system needs to be improved and “new ideas are certainly something I’d be willing to entertain.”
“Something needs to happen, or the industry is just going to bleed and wither away and be a shadow of its former self,” Bromley said.
“Politics aside, if (Rustad) can come up with a policy that enables my members to work, then I would be supportive of that. But then I’m supportive of any government that would come up with policies and fibre for our mills to run. Period.”
When Canfor announced its latest closures, Forests Minister Bruce Ralston said the sector was a “foundational part” of the province and the current NDP government would work to support both local jobs and wood manufacturing operations.
This report by The Canadian Press was first published Sept. 14, 2024
